Fiji hits tourism ceiling: rooms run out before visitors do

Fiji’s tourism sector — the backbone of its economy — is facing a paradox. International arrivals are strong, yet the growth curve is hitting a capacity ceiling: there simply aren’t enough available rooms. With resorts reporting consistently high occupancy, tourism operators are warning that demand is outrunning supply.

Tourism contributes roughly 40% of Fiji’s GDP when indirect effects are included, making it one of the most tourism-dependent economies in the world. After borders reopened, Fiji saw a rapid surge in arrivals driven by pent-up travel demand, aggressive airline scheduling, and strong marketing into Australia and New Zealand. This rebound pushed occupancy rates close to peak seasonal levels through large parts of the year — not just during school holidays.

The constraint has shifted from lack of travellers to lack of rooms.

Hotels expected demand to normalise in 2024 and 2025. Instead, average bookings have remained elevated as travellers shift toward destinations perceived as safe, stable, and culturally rich. Fiji benefits from geographic proximity to Australia and New Zealand, modernised infrastructure at Nadi International Airport, and smooth connectivity through multiple carriers. The challenge is that accommodation supply has not caught up.

Developers face barriers that slow down expansion:

• High construction costs driven by imported materials
• Skills shortages in tourism and construction labour
• Lengthy approval processes for coastal developments

Adding rooms isn’t simply a case of building quickly. Resorts require integrated infrastructure — water, power, transport links — all of which increase complexity and capital requirements. For remote island resorts, logistics and sustainability considerations add even more cost.

There is also a strategic debate emerging: should Fiji chase volume or value? The country has traditionally leaned toward the premium end of tourism. Sustainable growth may require focus on higher-spend visitors rather than aggressive volume strategies that could strain natural resources and degrade visitor experience.

Air capacity further complicates the picture. Fiji Airways has expanded long-haul routes and modernised its fleet to support growth. But if travellers cannot find accommodation, the country leaves money on the table. Increased flight arrivals without accommodation growth risks pushing travellers to competing Pacific destinations.

The industry’s preferred solution is targeted development — encouraging upgrades and expansions of existing properties rather than large greenfield mega-resorts. Boutique luxury projects and eco-resorts are gaining interest, aligning with traveller trends that prioritise sustainability and experiential travel.

Ultimately, the issue is not lack of demand. It’s that Fiji must carefully manage the balance between economic growth and environmental stewardship. Room shortages are not a crisis, but a signal: Fiji has reached a pivotal moment, where the next phase of tourism growth requires infrastructure investment that protects both people and place.